Johnson planning bill to change VA small business contracting process

Rep. Bill Johnson (R-Ohio)

Scott Denniston, executive director of National Veteran-Owned Business Association

An Ohio congressman is drafting legislation to make it easier for service-disabled veteran-owned businesses to obtain contracts in a set-aside program at the Veterans Affairs Department. No longer would an applicant have to prove they control 100 percent of their company's decision-making to be eligible.

"It makes absolutely no sense that a veteran who owns 51 percent of the company,
which is the majority of the company ... would not be considered in control of the company," said Rep. Bill Johnson (R-Ohio), in an exclusive interview with Federal News Radio. "I don't know of any company where any one person, other than a sole proprietorship, has 100 percent control."

Johnson, who is chairman of the House Veterans Affairs Oversight and
Investigations Subcommittee, did not provide specifics about the bill's new
requirements. But he did say the legislation will address what he believes is VA's "misinterpretation" of current law.

The 100 percent provision creates a "bright line" and removes subjectivity from the process examiners use to decide whether a business qualifies for the service-disabled veteran set-aside program, testified Thomas Leney, executive director of VA's Office of Small and Disadvantaged Business Utilization, in a subcommittee hearing
Thursday.

"We have improved our quality control and become more aggressive in referring
firms that we suspect are misrepresenting their status," Leney said in written
testimony. "In FY 2011 we referred 25 firms to the Office of Inspector General
(OIG) for investigation as possible misrepresentation. So far in FY 2012, we have
referred 59 firms."

But Johnson questioned the VA's interpretation, saying the rule falls short of the law's intent to ensure contracting opportunities for service-disabled veterans.

"We try to stay away from legislative solutions because it's better when the VA
understands the need for change," he told Federal News Radio. "But when the VA is
reading part of the law, but not the intent of the law, and interpreting the
language in a way that is ... making it difficult for veterans to get verified and
become a contractor," Congress must step in.

Scott Denniston, executive director of National
Veteran-Owned Business Association

"It's a step in the right direction, but it's a question of how far you want to
take that step," he said. "I think the system is inherently flawed when half the
people that apply get turned down."

Denniston, who is now executive director of the National Veteran Small Business
Coalition, said he agrees with Johnson that improvements are necessary. But he
stopped short of endorsing the idea of legislation.

"Personally, I don't think new legislation is necessary as much as Congress
getting
VA to write reasonable rules and interpret them reasonably and consistently," he
said. "That could be done over lunch between the congressman and the [VA
secretary]."

VA said it will work with Congress to address concerns
about the rules.

"VA is constantly looking to improve its processes for ensuring eligible veterans
have priority in getting VA contracts," said Josephine Schuda, a spokeswoman for
VA.